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Weighing the Price of Clean Energy

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Farmers plant a crop, but they hope to reap a balance. With energy concerns, Jim Veraguth believes, that becomes tricky.

Mr. Veraguth manages MFA Agri Services in St. Joseph and sees farmers in constant calculation on the fluctuating demand for corn to make ethanol and the shifting profitability of acres when weighing fertilizer costs against the price brought for the crop.

"It's just an all-tangled mess whenever you start looking at that," he said. "When it gets right down to it, it goes back to what's the cost of that barrel of oil."

U.S. Rep. Sam Graves insists the impact of energy costs will land disproportionately on farmers and rural America with passage of clean energy legislation now before Congress.

Moreover, the Northwest Missouri Republican contends the Waxman-Markey Bill, which might move to the full House next week, uses its stated purpose (to limit carbon emissions and slow climate change) as a disguise for an energy tax that will burden American businesses and shift jobs overseas.

"China is looking at us and laughing. It's going to make them more competitive," the lawmaker said Friday from his Washington office. "We are making ourselves less competitive."

Mr. Graves sits as one of three co-chairs of the Rural America Solutions Group, a collection of representatives engaged in disseminating information countering the energy legislation. It released a breakdown this week showing Missouri electricity consumers would suffer a $428 million negative impact from the bill in 2012.

Kansans would realize a $206.8 million additional power cost that year. At the same time, states on the east and west coasts would show cost benefits.

Rural areas take a greater hit, Mr. Graves said, because of the energy-intensive nature of farming, from the manufacture of products like fertilizer to the operation of field machinery to the transportation of goods to market.

Farmers, he said, buy their inputs at escalating retail prices, sell their output at see-sawing wholesale prices and have no chance to pass along increased costs to consumers. "It's going to squeeze them down really hard," the lawmaker said.

The Rural America Solutions Group has advocated an alternative energy plan that includes bringing 100 new nuclear plants on line in the next 20 years, drilling for oil in the Arctic coastal plain and offshore on the intercontinental shelf and making permanent the tax credits for renewable fuels.